12 July 2024 Punjab Khabarnama : Tata Projects has urged the government to look for ways to encourage private capital expenditure, which is vital to India emerging as the third largest economy in the world, in the Budget 2024 and also take a more holistic view to aid growth in the construction sector.
“I think private sector capital expenditure will play a significant role in growth, going forward, and the government should look at ways to boost private sector capital expenditure,” Tata Project’s managing director and chief executive officer Vinayak Pai told Moneycontrol.
While public sector spending by the government will play a pivotal role in the growing economy, the government should consider ways to encourage private capital expenditure in sectors such as semiconductors, electronics and data centres, the CEO of the Tata Group’s construction arm said.
Batting for infra
Pai also asked the government to consider reducing the goods and services (GST) tax rate on cement, which is at 28 percent.
“Another thing that should be re-looked is GST. In the construction sector, the GST on cement, which is at 28 percent, continues to be one of the challenges,” Pai said, adding the Budget should consider measures to improve the dispute resolution mechanism for infrastructure projects in India.
“There is definitely a liquidity issue in the industry at the moment. And the government can work towards better project definition and better DPR (detailed project report) quality, going forward, so that projects don’t change after a few years of execution,” Pai said.
He also requested the government to consider the introduction of surety bonds instead of bank guarantees to make it easier for construction companies to execute projects.
